College Assurance Plan etc. vs. Belfranlt Development Inc.

G.R. 155604, November 22, 2007

Facts:

This is the case of a fire that destroyed portions of the building owned by a realty
company (BDI). The origin of the fire was the stock room located at the third floor of the
building occupied by a pre need company (CAPP) which was leasing several units in the
second and third floors of the building.

For purposes of filing their insurance claim, CAPP requested for investigation of
the cause and circumstances surrounding the fire. So an arson investigator was assigned
by the Bureau of Fire Protection (BFP) who then submitted a field investigation report that
the fire was due to an overheated coffee percolator found and retrieved from the stock
room where the fire originated. The metal base of the heating device of said percolator
contained the inscription “caution do not operate when empty” which is a warning against
the use of such electrical device when empty and an indication that it is a water heating
appliance.
Based on this field investigation report of the arson investigator the BFP City Fire Marshal
issued to CAPP a certification reiterating the findings of the arson investigator as to the
origin and cause of the fire which was used by CAPP as supporting document for its
insurance claim.
Citing the same certification, BDI sent a notice to vacate the burned leased premises to
make way for repairs and to pay reparation estimated at P1.5 million. In response CAPP
vacated not only the said premises but also the units on the second floor. But it did not act
on the demand for reparation. Then BDI wrote another letter increasing the claim to P2
million and pointing out that CAPP had no reason to vacate the second floor not affected
by fire, hence BDI said that the lease of said units are still subsisting along with its
obligation to pay the rent. But the demand of BDI went unheeded since CAPP insisted
that the fire was a fortuitous event.

So BDI already filed a complaint for damages with the RTC. After trial the RTC
ruled in favor of BDI relying mainly on the BFP field investigation report and the BFP
certification which were presented during the testimony of a fireman who prepared it but
who had no participation in the investigation of the fire incident or personal knowledge of
said incident.

CAPP questioned this decision. It claimed that the report, the certification and the
testimony of the fireman are hearsay and incompetent evidence to prove that the cause
of the fire was the coffee percolator and insisted that the fire was a fortuitous event.

Issue:

WON the fire, which destroyed CAP’s building, is a fortuitous event.

Held:
No. Article 1667 of the civil code creates the presumption that the lessee (CAPP)
is liable for the loss or deterioration of the thing leased. To overcome such legal
presumption, it must prove that the loss or deterioration was due to fortuitous event and
not to its fault or negligence. If the negligence or fault of lessee coincided with the
occurrence of the fortuitous event, the fortuitous event cannot shield the lessee from
liability for his negligence or fault.

In this case the negligence of CAPP was the proximate cause of the fire that
destroyed portions of the leased units. Even without the testimony of the fireman and the
documents he prepared, such fault or negligence has been shown by applying the
doctrine of res ipsa loquitur under which expert testimony may be dispensed with.

To sustain the allegation of negligence under this doctrine, the following requisites
must obtain:

1. The accident is of a kind which does not ordinarily occur unless someone is
negligent;
2. The cause of the damage or injury is under the exclusive control of the person in
charge; and
3. The damage or injury suffered must not have been due to any voluntary action or
contribution on the part of the person damaged or injured.

In this case, the fire that damaged BDI’s building was not a spontaneous natural
occurrence but the outcome of a human act or omission. It originated in the stock room
under the control and possession of CAPP. BDI had no hand in the incident. Hence the
convergence of these facts and circumstance speaks for itself; CAPP alone having
knowledge of the cause of the fire or the best opportunity to ascertain it, and BDI having
no means to find out for itself, is sufficient for BDI to merely allege that the cause of the
fire was the negligence of CAPP and to rely on the occurrence of the fire as proof of such
negligence. It was all up to CAPP to dispel such inference of negligence, but their bare
denials only left the matter unanswered. Absent an explanation from CAPP on the cause
of the fire, the doctrine of res ipsa loquitur applies.

When some pecuniary loss has been suffered but its amount cannot from the
nature of the case be proved with certainty, temperate or moderate damages which are
more than nominal but less than compensatory damages may be awarded at the
discretion of the court. In this case in view of the inability of BDI to prove the exact
amount of pecuniary loss, P500,000 temperate damages is reasonable. CAPP must also
pay for the unpaid rentals of the floor they occupied until the end of their contract

Fortuitous events are those events which could not be foreseen or which though
foreseen, were inevitable. In this case, it was the fault and negligence of Belfranlt in
using the coffee percolator that caused the fire. If the negligence or faultof the obligor
coincided with the occurrence of the fortuitous event, and caused the loss or damage or
the aggravation thereof, the fortuitous event cannot shield the obligor from liability for his
negligence